Sprint Nextel (NYSE:S) and wholesale LTE provider LightSquared are close to inking a $2 billion-a-year network-sharing deal, according to a Reuters report, the latest twist in months-long speculation over whether LightSquared will partner with the carrier.
The report, citing unnamed sources, said the eight-year contract would give LightSquared access to Sprint's cell sites but that LightSquared would use its own spectrum for an LTE buildout. The outlines of such a deal have been speculated about for some time, although no dollar amount has ever been attached to such a deal.
Representatives from LightSquared and Sprint declined to comment.
Such a deal would allow Sprint to defray the costs of its own $4 billion to $5 billion network modernization project known as Network Vision, which will give the carrier the ability to support LTE via new, multi-mode base stations. The deal also would allow LightSquared to extend the reach of its network while also lowering costs. However, it is unclear where LightSquared would get the cash necessary for the deal; the company reportedly has been considering an initial public offering.
Meanwhile, LightSquared continues to beat back worries that its forthcoming network will interfere with GPS receivers. LightSquared CEO Sanjiv Ahuja argued that "the GPS industry has used this issue as a basis for a campaign to block further development of this new network."
LightSquared has been testing its network near Las Vegas to see how it interferes with GPS. A final report on the matter is due to the FCC by June 15. Ahuja said that if the GPS industry succeeds in blocking LightSquared's network it will be "a huge set back for innovative efforts to increase productivity and further grow our economy to create jobs," and that the two sides should work on integrating the technologies.
"Rather than using litigation and political influence to resolve technical challenges, we should once again rely on market forces in combination with pro-growth government policies," he wrote in an op-ed in The Hill. "In this case that means both industries should commit themselves to work together with federal agencies under the FCC's leadership to assess any potential problems and identify solutions."
Deere & Co., the world's largest maker of farm equipment, raised interference concerns with the FCC, and said in a filing that Deere's GPS receivers deteriorated within 22 miles of a LightSquared base station. "There are major economic consequences," Deere said. "Deere customers in agriculture, construction and other applications will lose high accuracy navigation in and near areas served by LightSquared."
For more:
- see this Reuters article
- see this The Hill article
- see this Bloomberg article
- see this WSJ article (sub. req.)
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